The UK’s £2.9 billion (IRI) convenience soft drinks category is growing at +6% and is one of the most profitable categories for retailers and wholesalers alike.
Seasonal occasions present convenience and impulse stores with some of the biggest opportunities to drive sales of soft drinks.
Neighbourhood stores see a significant rise in soft drink sales around key seasonal periods such as summer and Christmas.
Summer continues to be the most important season for soft drinks from a value sales point of view, worth £457m, while Christmas is the fastest growing period of the year for value sales of soft drinks, up +21% year-on-year (IRI).
Customers are also buying more soft drinks for events around summer BBQs.
For example, shoppers will spend an average of £4.71 on soft drinks during Easter compared to an average of £3.20 outside of the holiday (Lumina).
“While the pandemic has limited the number of opportunities where friends and family can come together, it’s important that retailers continue to prepare for key seasonal dates to take advantage as restrictions continue to ease,” comments Chris Newman, head of category management for convenience and impulse at Britvic.
After the biggest December ever in 2020, total market take-home grocery sales fell slightly in the 12 months leading into Christmas 2021 but were still up +£1.2bn when compared to pre-pandemic figures, indicating that we spent more time indulging at home (Kantar).
Convenience penetration was down 10% vs Christmas 2020 (Lumina) as restrictions lifted and shoppers moved back into grocery and discounters (Kantar), while symbol stores and independents (-6.9%) and co-operatives (-8.5%) declined at a faster rate than their grocer counterparts (Kantar).
The total soft drinks category remains in growth (+12%) in the convenience channel ahead of the grocery channel, +8% (Nielsen), and was in the top five most purchased categories and was the fourth fastest growing category in convenience stores in 2021 (Lunina).
“Good visibility in store via the use of secondary displays helped to drive the soft drinks category ahead of total convenience performance, with nearly a quarter of shoppers saying they purchased a product from a display on the end of an aisle (Lumina),” says Newman. “Fewer planned trips also presented further opportunities for retailers to grow soft drink sales through impulse purchases, PMPs and promotional offers, which all saw increased sales in Christmas 2021 on the previous year (Lumina).”
Consumers are now making more pre-planned purchases around seasonal occasions than they were pre-pandemic, with food and drink playing a more important role in these occasions (IGD). A total of 68% of shoppers plan the food and drink they buy for these seasonal events, increasing from 60% pre-pandemic (IGD).
“This trend is expected to continue this year, and retailers can take advantage by getting the right range and merchandising in place ahead of these events to help their customers quickly and easily find the soft drinks they are looking for,’ adds Newman. “For instance, shoppers have been choosing to spend more time outside hosting picnics and BBQs during the summer months to meet friends and family during COVID.
They also tend to purchase soft drinks in larger quantities during these occasions, with volume of soft drinks per trip at its highest over summer (Kantar).
“Therefore, shifting focus to larger bottles from bestselling brands, such as 2L Pepsi MAX and Pepsi MAX Lime and multipacks of Pepsi MAX, 7UP Free and Tango, will present additional chances to pick up extra pre-planned sales to meet those socialising occasions,” Newman suggests.
Other summer events linked to big sporting occasions, such as the FIFA World Cup 2022, also present further opportunities for drinks suited for adult socialising, including adult soft drinks such as J2O and mixers to complement spirits, such as Britvic mixers. Britvic is the third largest mixer brand in the UK (CGA), and last year Britvic Tonic Water launched into the convenience channel for the first time in 850ml packs in low-calorie and regular variants – giving adults more options for mixing drinks.
Increased restrictions on people’s livelihoods have encouraged more shoppers to seek out everyday treats within the convenience sector – 9% of shoppers are on a treat mission, up from 7% last year (Lumina). The expectation is that this will continue into 2022 for both in- and out-of-home, as more people look to meet up again and treat themselves to make up for lost time.
This trend will be driven by ‘treat-led families’, who spend more (+8%), visit more often (+4%) and spend longer in store (+2%) (Lumina).
Amy Burgess, Senior Trade Communications Manager at Coca-Cola Europacific Partners (CCEP), comments: “We expect larger packs to remain in high demand as people continue to make the most of the opportunity to socialise at home and enjoy summer occasions in their gardens with friends and family. Value sales of our Coca-Cola and Fanta multipacks continue to grow (Nielsen) thanks to the volume and value they offer, especially for consumers looking to stock up in a single shop.
“That said, on-the-go occasions are back, and sales of on-the-go soft drinks are increasing as people get back out and about (Nielsen). That’s why it’s important for retailers to find the right balance between on-the-go and at-home formats, keeping space for both.”
With inflationary pressures coming to bear this year, value will be a priority for consumers, which is why it is one of the key ‘enablers’ in CCEP’s Taste Tomorrow soft drinks category vision.
Recent research (Lumina) highlighted that price remains the second most important factor for shoppers when selecting their items. Accounting for more than 69% of total soft drink sales in convenience (Lumina), price-marked packs (PMPs) can help to reassure shoppers who are spending carefully but who still want to enjoy their favourite brands.
In light of this, price-marked packs can be an effective way to deliver visible value for shoppers, and also offer a unique point of difference for convenience wholesalers against larger stores. More than two-thirds (68%) of independents are in favour of PMPs, saying the confidence they give shoppers that they are getting value-for-money is the key purchase reason (Lumina).
CCEP’s best-loved brands, including Coca-Cola, Fanta, Sprite, Dr Pepper, Monster, Relentless and Reign are all available in PMPs and plain packs, so wholesalers can choose the best option for their stores. With 29% of consumers saying they are focussed on sugar reduction following the pandemic (IGD), low and no sugar options should be high on the agenda with wholesalers.
Adrian Troy, Marketing Director at Barr Soft Drinks, comments: “By stocking a range of quality and trusted brands from Barr Soft Drinks, there are some key opportunities to drive incremental sales and increase profits.”
Over the last year, the Barr Soft Drinks portfolio of brands delivered an additional £14.3 million in retail sales value to the soft drinks category (IRI).
“Retailers should also ensure their fixture is balanced to reflect seasonal category uplifts, such as increasing facings of chilled carbonates and juices during spring and summer, in order to generate maximum profits from the chiller,” adds Troy.
As sustainability continues to become a key driver for shoppers when making purchasing decisions across categories, Barr Soft Drinks recently rolled out 100% recycled plastic (rPET) bottles across all 500ml IRN-BRU and Rubicon products.
The new 100% rPET packs are available now, with the rest of the IRN-BRU and Rubicon range due to change by the end of this year.
The move is a crucial part of a wider initiative, No Time To Waste, which the company launched last year, bringing together net-zero, packaging, waste, water and sustainable sourcing workstreams.
IRN-BRU is the UK’s No.1 flavoured carbonate brand (IRI) and showed £3 million growth from loyal shoppers in 2021 (IRI). IRN-BRU XTRA, delivering extra IRN-BRU taste with zero sugar, is growing three times faster than the category (IRI).
Rubicon is now worth more than £57 million (IRI) and is growing faster than all other major soft drinks brands in the top 25. Rubicon Spring, the UK’s No. 1 sparkling flavoured water brand (IRI), brought 55% new shoppers into the category in 2021 vs previous year (Kantar). Rubicon Spring Pineapple Passion launched in summer last year, targeting shoppers at the water fixture who are looking for an exciting new flavour. Rubicon Sparkling Raspberry & Pineapple is the first soft drink in the UK with this fruity flavour combination and the brand’s first Sparkling flavour launch for over 30 years.
Adrian Hipkiss, Marketing and International Business Director at Boost Drinks, comments: “Energy is the largest soft drink category in the independent channel (IRI) and £1 in every £3 is spent on soft drinks being spent on an energy drink (IRI), making it an incredibly exciting space to operate in. When taking a closer look into the energy sub-categories, it’s the Energy Stimulation drinks which play a significant role in contributing to the growth of the soft drinks category, growing +24.4% YoY (IRI), and providing 42% growth to the soft drinks category (IRI).”
The past two years of restrictions has seen a shift in energy drink shopping habits. As the nation travelled less and stayed home more, on-the-go consumption became ever so prominent, resulting in a growing consumer demand for 1litre and multi-pack take home formats.
“Despite restrictions now easing and footfall rising, take home products continue to be a huge growth opportunity for retailers as shoppers continuously seek ready-to-drink, on-the-go energy quality options at everyday value prices,” Hipkiss adds. “Boost is the only brand operating in 4 functional drink categories – Energy Stimulation, Sports Drinks, RTD Iced Coffee and Protein Shakes (IRI) and within the energy stimulation category, it’s the third largest brand (IRI), something we’re incredibly proud of.”
Boost Original is available in 1litre, 500ml and Boost’s leading SKU, the 250ml Original Energy.
“This range of options and pack sizes allows consumers to rely on us as a brand and purchase a Boost that suits every occasion, whether on the move or stocking up to enjoy at home,” says Hipkiss.
To boost this growth even further, flavours in energy now account for 38% of Stimulation sales (IRI) and are in 29% YoY growth (IRI), showing that there’s a significant thirst for a range of flavour variants to suit all tastes.
“Boost Red Berry is the largest selling 250ml Stimulation Flavour SKU (IRi), however considering the fact that 39% of Stimulation shoppers actually make their purchase based on flavour alone, it’s important to stock a variety of flavours rather than relying on 1 or 2,” Hipkiss suggests. “Overall, to maximise on profits retailers should prioritise stocking Boost as a leading brand within the soft drink growth category, especially as a brand that provides a diverse range of pack formats, flavours and take-home offerings, ensuring retailers can meet the needs of their core consumer groups.”
Over the past two years, the various lockdowns and restrictions have also significantly impacted the Sports Drinks sector. As a result of people staying home more and partaking in less sports, the category was hit hard, and sales for Sports Drinks experienced a sharp decline.
However more recently, there has been an optimistic turn for the Sports Drinks category. With the easing of restrictions, increase of footfall and the return of a pre-pandemic sense of normality, it is safe to say that not only are Sports Drinks sales recovering, but they’re also rising at a rapid rate. Over the last 52 weeks, Sports Drinks have become the fastest growing category within soft drinks (IRI), with a +36% value growth YOY (IRI).
Boost Sport takes prides in its strong position in the Sports Drinks category. Sitting at the forefront of the category’s growth pattern with its +49% value growth YOY (IRI), Boost Sport is currently the #2 Sports Drink brand in value and volume (IRI), selling more unit sales than the 3rd, 4th and 5th brands combined (IRI).
“As consumers are increasingly turning to high-quality Sports Drinks, it is important for retailers to take into consideration consumer behavior and the main drivers behind purchase for Sports Drinks,” Hipkiss comments. “We know that ‘Taste’ and ‘Value’ are the two main drivers of choice for Sports Drink consumers. Therefore, it is essential that retailers stock an offering that combines both ‘taste’ and ‘value’ to effectively maximise sales to impulse shoppers – whilst also meeting their different budgets and tastes.”
65% of Energy and Sports Drinks sales are made up of consumers whose choice is driven by exciting flavours (37% share of volume) and habit (28% share of volume). Taking these drivers into account when considering which brands and SKUs to stock provides a great opportunity for retailers to access their key audiences on a personalized level and ensure successful sales rates.
Mike Buckland, Marketing Controller, Highland Spring Group, comments: “As one of the UK’s leading brands of natural source spring water, Highland Spring has a wide view of trends within the drinks category.” Multipacks are popular for those with busy family lifestyles, or those who do a bulk shop at their local supermarket. Highland Spring is seeing positive sales within multipacks.
The brand’s plain bottled water generates the most value sales in its six-pack 1.5L format, resulting in more than £27million in sales in the UK within the year (Nielsen). Sales of plain water are closely followed by 12-packs of the 500ml, then 750ml single serves (Nielsen).
In the sparkling water category, the 1.5L single bottle format performs the best, perfect for enjoying by yourself or sharing with friends, with value sales increasing by 34% in the last 12 weeks (Nielsen). This format is followed by the larger six pack of the 1L size, and the eight pack of the 500ml, perfect to have at home and enjoy as an everyday treat or to grab before heading out.
Highland Spring’s sparkling flavoured cans come in 330ml sizes and can be purchased as a four pack or as single cans.
“The four-pack is performing well, with sales expected to experience a rise as we head into the summer months,” says Buckland. “Currently, the Pear and Elderflower flavour is proving to be the most popular within consumers (Nielsen), which, like all of our flavoured sparkling products, can be enjoyed on their own or as part of a longer serve.”
Research shows that the sugar free drinks industry is set to grow significantly in coming years (Allied), as health and wellbeing continues to be a big driver within the drinks category.
Highland Spring’s sparkling flavoured cans are perfect for those looking for a healthier fizzy drink option to enjoy, whilst keeping hydrated. All three flavours – Blackberry, Plum & Hibiscus, Pear & Elderflower and Rhubarb & Ginger – contain no added sugar or artificial sweeteners.
At under 35 calories per can, they are also an ideal choice for those looking to stick to healthy products whilst satisfying a fizzy drink craving and enjoying a fuller flavoured, fruity refreshment.
Highland Spring’s sparkling flavoured cans are performing very well within the impulse channel, experiencing an uplift of 111% in value sales within the last 12 weeks (Nielsen), which we expect to see continue as we enjoy the summer months.
Andy Lewis, Marketing Controller at Sunmagic Juices, comments: “Wholesalers traditionally do well in summer with soft drinks sales. But 2022 could see some changes, with carbonated drinks and bottled and flavoured waters facing pressure, and juices and premium adult soft drinks coming to new prominence as healthier treats.”
Sunmagic Juices is a UK-based producer of premium juice, juice drinks, fresh juice and smoothies. Its Daymer Bay Drinks range of premium adult soft drinks launched into the on-trade last summer and have just debuted at the Farm Shop & Deli Show, targeting wholesalers serving upscale independent retailers.
Not from Concentrate juice remains the dominant sector with a value of £594m (Nielsen), up 2.9%. And adult soft drinks, where Sunmagic Juices have recently launched Daymer Bay range, are seen as a “pick me up” and most often drunk on their own (70%), versus 30% as mixers. It’s a trend that was there before the pandemic and is picking up again as normal life returns.
Freshly squeezed’s value growth of +15.3% YOY makes it the fastest growing juices sector (Nielsen). Figures for the latest 12 weeks to December 2021 show value growth of +26.8% (£11.2m). The lower volume growth of +12.4% highlights the price inflation in the category in 2021. 1L is the strongest selling size, representing £29.6m annual sales, and has been driven in part by the several Covid lockdowns experienced in the last 12/18 months.
“Taste appeal is the most important factor in premium soft drinks like the Daymer Bay Drinks range,” says Lewis.
Adult soft drinks are seen as a “pick me up” and most often drunk on their own (70%), versus 30% as mixers. Before the pandemic, the value of soft drinks and mixer sales was growing much faster than volume, a sure sign that consumers are happy choosing higher cost options. The value of premium mixer sales rocketed by 81.3% in 2019 to £323.1m (CGA). It’s a trend that was there before the pandemic, and it’s picking up again as normal life returns.
The Sunmagic brand is one of the UK’s most widely distributed ranges of 100% pure fruit juice, juice drinks and smoothies.
The Sunmagic core fruit juice range is available in both 330ml and 500ml bottles including the most popular flavours of 100% Orange and 100% Apple. Its juice drinks range in 500ml bottles has a wide variety of flavours including Orange & Carrot, Summer Sensation, and Cranberry.
Sunmagic’s Hydra Juice sub-brand offers an extensive range of school compliant, healthy children’s’ drinks. The Hydra Juice range is fully school compliant and comes in 200ml cartons and 300ml bottles. Within the offering, it includes the core Orange and Apple varieties along with a range of unique flavour offerings such as its Strawberry & Cherry and Raspberry & Blueberry SKU’s.
The Village Press brand offers a wide range of premium freshly squeezed and cold pressed products in a wide choice of flavours and formats, 250ml, 500ml, 1l and 2.27 l, to suit all drinking occasions, whether in or out of the home. Throughout COVID, sales of freshly squeezed juices, especially fresh orange juice have grown strongly, given the natural and high source of Vitamin C it offers.
Daymer Bay Drinks’ artisanal range of premium juices and lemonades addresses the trend for consumers being more likely than ever before to choose premium soft drink options, with taste the key driver and good value growing in importance, given the current economic climate.
Angela Reay, Brand and Innovation Controller, Nichols PLC, comments: “Carbonates come into their own during the spring and summer months, and traditionally they overtrade during this time. In fact, spring and summer is the most important time for soft drinks, as sales are at their highest, with more than half of all category sales taking place between April to September, and soft drinks sales increasing by over 10% from quarter one to quarter two annually (Nielsen).”
This is due to consumers seeking out those products that are refreshing, as well as flavours that capture the mood of the warmer weather and longer days. The Nichols plc portfolio line-up has a wide range of flavours and formats that tap perfectly into this sales opportunity, with its flavoured carbonates range performing well, growing +5.9% year on year (Nielsen).
Nichols’ carbonates portfolio is comprised of three brands: Vimto, known for its refreshingly different flavour variants, Levi Roots, with its tropical flavours that promise to put some music in your glass and Sunkist, a brand with Californian roots of sun, sand and surf. Nichols also offers a range of No Added Sugar variants to offer complete choice, and over the past ten years the company has cut 1,333 tonnes of added sugar from its UK packaged products.
“Unique flavours and taste exploration continue to be key consumer trends and shoppers are actively looking for inspiration and wider world flavours to enjoy,” adds Reay. “Both exotic and berry flavours are extremely popular, and consumers are excited to try different fruit combinations.”
Across the portfolio, Nichols’ brands offer alternative flavour options. Delivering unique and distinctive flavours is what sets Vimto apart as a brand, and consumers already love it for its refreshingly different taste. It’s the combination of fruits, herbs and spices that has been evolving since 1908 that makes Vimto such a unique, recognisable and trusted brand. In the last 12 months alone in Vimto carbonates there were 99 million 250ml servings – that’s three servings of fizzy Vimto for every second of the year (Nielsen).
“Vimto is the only squash brand that has enjoyed 10 years of consecutive growth (Nielsen), and we are delighted to see that it is continuing to experience this strong momentum,” says Reay. “2021 was a pivotal year for the brand with key initiatives that have reinvigorated the category.”
From the roll out of a new visual brand identity, as well as launching a category first fortification of Vitamin C & D across the entire squash range, Nichols also introduced new flavour, Blackberry, Raspberry & Blueberry.
Vimto’s squash performance has grown by +4.3% in value sales over the past year alone (Nielsen), while Vimto squash is currently outperforming the market by an impressive +11.4ppts (Nielsen).
“As we see a resurgence of on the go, we are beginning to witness consumers seek out healthy hydration moments and prioritise still juice drinks in a bid to make more informed and balanced choices,” says Reay. “Over 60% of servings are currently chosen for health or natural benefit reasons, and these reasons for consumers over index versus the rest of the category.”
Chris Butler, Marketing Manager at Radnor Hills, comments: “Multipacks are becoming more common as they provide great value for the customer. This is why we recently launched an on-pack promotion with Alton Towers on our Radnor Splash 12 packs and 6 packs, to not only provide customer value but also promotional 2 for 1 on tickets at one of the UK’s top theme parks.”
With the rise in consumers becoming more health conscious, there is a huge opportunity for brands to release low/ no sugars drinks into the market. Radnor Infusions were released in 2020 for this very reason as since the beginning of the pandemic, consumers are focusing more on their health and seeking products with low/no sugar levels.
Radnor Splash continues to be one of the most popular products at Radnor Hills, in 2021 two bottles were sold every second. They are the brand’s best-selling products as they are value driving, especially when the range expanded into Tetra Pak during the pandemic to offer more options at low prices.
Radnor Fruits Sparkling cans were recently launched in a fridge pack.
This summer Radnor is running a London project where employees are hitting the streets of London promoting and selling two brands, Heartsease Farm and Radnor Infusions.
A Red Bull spokersperson comments: “With the overall Soft Drinks category in modest growth at +9.0%, vs YA (Nielsen), the Sports & Energy category has outstripped this at a faster pace of +19.6% vs YA (Nielsen).”
The Sports & Energy category has seen a steep upward trajectory in growth over the last year, now worth over £1.7bn and totalling more than £279.9m vs 2021 (Nielsen). This growth has been fuelled by the increased demand for Functional Energy amongst shoppers. These drinks have added over £191.4m in value vs YA and have exceeded the billion-pound mark, today worth over £1.1bn annually (Nielsen).
As the number one single serve soft drink in the UK (Nielsen), Red Bull is appreciated worldwide by athletes at the top of their game. Red Bull Energy Drink 250ml is already the perfect pack size for a functional energy boost enjoyed alongside exercise, containing the same amount of sugar as a glass of orange juice and the same caffeine content as a single cup of coffee. Delivering naturally occurring amino acids and B-Vitamins, Red Bull Energy Drink is the leading choice for consumers looking to maintain and support active, healthy lifestyles.
As shoppers once again enjoy a functional boost on their office commute and on the move, larger Red Bull formats such as Red Bull 355ml Energy Drink and Sugarfree SKUs have helped to draw more new shoppers to the category.
But with multipacks in strong double-digit growth, +18.9% MAT (Nielsen) and driving 84% incremental growth (Kantar), now is also the perfect time for wholesalers to stock up on multipacks ahead of a busy summer season, with penetration growing by 15.7% in the last 52 weeks (Kantar). Red Bull Energy Drink 250ml 4pk is the no.1 best-selling multipack in the Sports & Energy category and, with +21.4% growth, it is the fastest growing full sugar multipack in the entire Red Bull range (Nielsen).
Matt Gouldsmith, Channel Director, Wholesale, Suntory Beverage & Food GB&I, comments: “Although drink-later formats currently make up 62% (Nielsen) of the total share of soft drinks, drink-now formats are seeing high year-on-year growth at 26% (Nielsen), with shoppers seeking more hydration while out and about following the end of Covid restrictions. To capitalise on this growing trend, wholesalers should stock up on on-the-go formats of energy and sports drinks like Lucozade Energy and Lucozade Sport to help retailers meet shopper needs, particularly as the weather gets warmer and shoppers spend more time outside.”
We have seen a long-term trend towards drinks with lower sugar as consumers are becoming more aware of their health and wellbeing. There was a 43.5% (Kantar) decrease in the amount of sugar in take-home soft drinks between March 2014 and March 2020, and low- or no-calorie continues to outperform regular soft drinks, with a 68.6% share of total soft drinks. And when it comes to energy drinks, the no- and low-sugar market has grown more than the full-sugar market over the past year with an increase of over 24% (IRI).
“Wholesalers and retailers should ensure to stock up on lower-sugar drinks such as Ribena Light and Lucozade Zero – worth a combined £46.8M – to capitalise on the ongoing trend towards lower-sugar choices,” adds Gouldsmith. “Ribena Light has seen over 23% growth in the last year, which shows this demand among shoppers for lower-sugar soft drinks.”